To combat with the inflationary pressures, the finance minister is more likely to announce numerous tax amendments and concessions in the coming Union Budget for the financial year 2013-2014 to be announced before the Parliament on 28th February 2013.

Tax on Rent

For people who stay in rented accommodations and do not have their own houses and employees who do not get any house rent allowance or accommodation facility from their employer will be entitled to a special tax deduction on the accommodation rent paid by them. Under the Income Tax Act, section 80GG, an individual will be in a position to avail a tax deduction of 25% on the total rent amount.

As a tax concession for Life insurance policy holders in the upcoming budget, the Finance Ministry is also expected to come up with a proposal to eliminate service tax on first premium as well as create separate pension scheme exemption limit.